U.S. Grants License for Oil and Gas Exploration in Venezuela, Treasury Reports

• The license requires contracts with Venezuela's government or PDVSA to follow U.S. laws, with disputes resolved in the United States and payments to sanctioned entities made into U.S.-overseen funds
• Venezuela's current oil production stands at almost 1 million barrels per day, with the U.S. drafting a $100 billion reconstruction plan to expand foreign producer participation
• Major oil companies including Chevron, Repsol, ENI, and Reliance Industries have applied for individual licenses to expand operations, though the volume of requests has delayed investment progress

Summary

Key Development:

The U.S. Treasury Department issued a general license on February 10, 2026, authorizing American companies to provide goods, technology, software, and services for oil and gas exploration, development, and production in Venezuela. This marks a significant easing of sanctions originally imposed in 2019.

Background:

The license follows recent diplomatic progress, including U.S. forces' activity in early January and interim President Delcy Rodriguez's government agreeing to a $2 billion oil supply deal with Washington. Venezuela's current oil output stands at approximately 1 million barrels per day (bpd).

License Restrictions:

• All contracts with Venezuela's government or state energy company PDVSA must comply with U.S. laws
• Disputes must be resolved in the United States
• Payments to sanctioned entities require deposit into U.S.-overseen funds
• Formation of new joint ventures in Venezuela is not authorized
• Equipment maintenance and repairs for existing operations are permitted

Market Implications:

The U.S. has drafted a $100 billion reconstruction plan for Venezuela's oil industry, expected to facilitate foreign producer expansion and attract new service providers. Major companies including Chevron, Repsol, ENI, and Reliance Industries have applied for individual licenses to expand operations.

Outlook:

The general license addresses delays caused by numerous individual license requests and aims to accelerate investment and export expansion. The Energy Information Administration reported Venezuelan oil output could return to pre-blockade levels by mid-2026, signaling potential supply increases in the global energy market.